COC Ladenburg-8-7-2009.pdf

Disclosures and Analyst Certifications can be found in Appendix A.
NEW YORK, NY, MELVILLE, NY, PRINCETON, NJ LOS ANGELES, CA MIAMI, FL LINCOLNSHIRE, IL BOCA RATON, FL

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IIDDAACCOORRPP ((IIDDAA))
2Q09 Financial Results – Lowering to NEUTRAL from BUY Based on
Valuation
Highlights
• We are lowering our rating to NEUTRAL from BUY on IDA shares.
Our price target of $28 per share is based on a 2009/2010 P/E of
10.9x/10.4x EPS of $2.56/$2.69.
• While we continue to view IDA as a fundamentally sound small-cap utility
with meaningful potential rate base growth and long-term earnings power,
as well as, solid cash flow and credit profile, IDA shares are now trading
just below our price target objective and we now rate IDA shares
NEUTRAL.
• On August 6, 2009, IDA reported 2Q09 net income of $27.5m or $0.58 per share compared to a net income of $17.5m or $0.39 per share in 2Q08.
Idaho Power Company reported 2Q09 net income of $26.3m compared to
$17.7m in 2Q08. IDACORP Financial Services (IFS) contributed $188k in
2Q09 compared to $701k in 2Q08. Results include: implementation of
new base rates in Idaho (Feb 2009) and improved hydro conditions
(+$11.9m), reallocation of PCA related costs (+$6.5m), deferral of future
recovery of power supply costs from 2007 (+$6.4m), partially offset by
decreased retail sales volumes (-8%) due to mild weather.
• The company revised certain components of its 2009 operating/financial
assumptions. Revisions include: IPC hydroelectric generation 7.5m-8.5m
MWh (previously 6.5m-8.5m) due to above normal precipitation in June
and above normal storage levels at Brownlee, and Idaho Power and
IDACORP effective tax rates of 26%-31% (previously 31%-35%) and 19%-
24% (previously 24%-28%), respectively.
• The Company expects utility capital expenditures to be approximately
$730-$750m in 2009-2011(previously $780-$800m) which excludes
development expense of approximately $50m for new baseload resource
in 2009 contingent on the CPCN outcome expected in 3Q09. The
company believes it can finance its 2009 capital expenditures with
internally generated funds and its DRIP program and does not need to
access the capital markets in the near-term. Longer-term infrastructure-
related projects would likely be financed by a combination of internally
generated cash flow and external debt/equity financing.
• IDA recently filed for Oregon rate relief (+$7.3m) and may file for Idaho
rate relief by the end of this month.
COMPANY & MARKET DATA
Price $27.79
Price Target, Excl Dividends (YE09) $28.00
52 - Week Range $20.91-$33.89
Mkt. Capitalization (mill) $1,306
Enterprise Value (mill) $2,501
FD Shares Outstanding (mill) 47
Avg. Daily Trading Vol. (000) 366
Book Value per Share (1Q09A) $28.03
Dividend (FY09E) / Yield $1.20 4.3%
FY2007A FY2008A FY2009E
Revenue (mill) $879 $992 $1,059
1Q EPS $0.56 $0.48 $0.40
2Q EPS $0.42 $0.35 $0.58
3Q EPS $0.62 $1.14
4Q EPS $0.23 $0.26
EPS $1.86 $2.22 $2.56
Prior EPS
Consensus EPS $2.35
P/E 14.9x 12.5x 10.9x
EV/EBITDA 9.8x 8.2x 7.7x
P/FCF -57.3x -57.3x -52.4x
ESTIMATES
Volume in Millions
0.0
1.0
2.0
3.0
$20
$25
$30
$35
$40
Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08
50-day average
200-day average
Chart data: Bloomberg
Brian J. Russo, CFA
646-432-6312
[e-mail]
James Berry
212-409-2685
[e-mail]

Power and Utilities Sector
Company Update

August 7, 2009
NEUTRAL
Brian Russo 646.432.6312 IDACORP (IDA)

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APPENDIX A: IMPORTANT RESEARCH DISCLOSURES

ANALYST CERTIFICATION
I, Brian Russo, attest that the views expressed in this research report accurately reflect my personal views about the subject security
and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or
views expressed in this research report.
The research analyst(s) primarily responsible for the preparation of this research report have received compensation based upon
various factors, including the firm’s total revenues, a portion of which is generated by investment banking activities.

COMPANY BACKGROUND
Headquartered in Boise, Idaho, IDACORP, Inc., (IDA) is a holding company formed in 1998 that is primarily engaged in the
generation, transmission, distribution, sale and purchase of energy. IDA serves over 466,000 retail customers across its 24,000sq
mile service territory in both Idaho and Oregon, and owns approximately 3,267MW of generating capacity. IDA’s principal operating
subsidiary is Idaho Power Company (IPC). The company’s unregulated utilities include IDACORP Financial (IFS) that invests in
affordable housing and real estate and Ida-West Energy Company (Ida-West) that operates small hydroelectric generation projects.
VALUATION METHODOLOGY
We value equities utilizing a multi-faceted approach which includes; sum-of-the-parts, net asset value, discounted cash flow, leading
P/E, EV/EBITDA.
RISKS
On top of normal economic and market risk factors that impact most all equities, Idacorp (IDA) is uniquely at risk to:
Because of IPC’s predominantly hydroelectric generating base and heavy reliance on hydroelectric generation, which can be
adversely affected by weather, reduced hydroelectric generation can reduce revenues and increase costs.
Continuing declines in stream flows and over-appropriation of water in Idaho may reduce hydroelectric generation and revenues and
increase costs.
Load growth in IPC’s service territory due to customer growth and demand for energy exposes it to greater market and operational risk
as increased reliance on purchased power to meet load requirements could increase costs and reduce earnings and cash flows.
IPC’s reliance on coal and natural gas to fuel its generating facilities exposes it to risk of increased market prices, which could
increase costs and reduced earnings.
Changes in temperature and precipitation can reduce power sales and revenues.
Climate change could affect customer demand and hydroelectric generation and lead to restrictions on generation resources.
If Idaho Public Utility Commission (IPUC), the Oregon Public Utility Commission (OPUC) or the Federal Energy Regulatory
Commission (FERC) grant less rate recovery in rate case filings than IPC needs to cover the costs of providing services, financial
results could be adversely impacted and economic expansion may be limited.
Conditions that may be imposed in connection with hydroelectric license renewals may require large capital expenditures and reduce
earnings and cash flows.
The cost of complying with environmental regulations related to air quality, water quality, natural resources and health and safety can
increase capital expenditures and operating costs and reduce earnings and cash flows.
IDACORP and its subsidiaries are subject to costs and other effects of legal and regulatory proceedings, settlements, investigations
and claims, including those that have arisen out of the western energy situation.
IPC’s business is subject to substantial governmental regulation and may be adversely affected by increased costs resulting from, or
liability under, existing or future regulations or requirements.
Increased capital expenditures can significantly affect liquidity.
As a holding company, IDACORP does not have its own operating income and must rely on the upstream cash flows from its
subsidiaries to pay dividends and make debt payments.
A downgrade in IDA’s credit ratings could negatively affect the company’s ability to access capital and increase their cost of
borrowing.
Adverse results of income tax audits could reduce earnings and cash flows.
Employee workforce factors, including the loss or retirement of key personnel, availability of qualified personnel and an aging
workforce, could increase costs and reduce earnings.
Brian Russo 646.432.6312 IDACORP (IDA)

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STOCK RATING DEFINITIONS
Buy: The stock’s return is expected to exceed 15% over the next twelve months.
Neutral: The stock’s return is expected to be plus or minus 15% over the next twelve months.
Sell: The stock’s return is expected to be negative 15% or more over the next twelve months.

Investment Ratings are determined by the ranges described above at the time of initiation of coverage, a change in risk, or a change
in target price. At other times, the expected returns may fall outside of these ranges because of price movement and/or volatility. Such
interim deviations from specified ranges will be permitted but will become subject to review.

RATINGS DISPERSION AND BANKING RELATIONSHIPS (as of 08/01/09)
Buy 69% (7% are banking clients)
Neutral 29% (0% are banking clients)
Sell 2% (0% are banking clients)

INVESTMENT RATING AND PRICE TARGET HISTORY

Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. Page - 4 -
COMPANY SPECIFIC DISCLOSURES:
Ladenburg Thalmann & Co. Inc. does not make a market in subject company. Ladenburg Thalmann & Co. Inc. has neither had an
investment banking relationship with, nor received investment banking fees from the subject company in the past 12 months. Neither
the Analyst, nor members of the Analyst’s household own any securities issued by the subject Company.

GENERAL DISCLAIMERS
Information and opinions presented in this report have been obtained or derived from sources believed by Ladenburg Thalmann & Co.
Inc. to be reliable. The opinions, estimates and projections contained in this report are those of Ladenburg Thalmann as of the date of
this report and are subject to change without notice.

Ladenburg Thalmann & Co. Inc. accepts no liability for loss arising from the use of the material presented in this report, except that
this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to
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without the prior written consent of Ladenburg Thalmann & Co. Inc.
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